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Common mistakes with payroll made by small business owners.

Employees perform tasks to help your product function to its optimum ability. What do they ask? To be treated and compensated fairly. Everyone deserves respect and being compensated for the work that they put in is only fair! When you're considering how much to reward your team for achievements or for exceeding expectations, it's important to reward them fairly in comparison to the work they're putting in. When it comes to compensation and benefits, clearly your employees should be compensated based on their workloads and talent level but they should also be rewarded when they go above and beyond. The best way to reduce these kinds of errors related to your payroll or invoices are having automated accounting software like QuickBooks premier hosting. Let’s discuss few common payroll mistakes that are made by the businesses:

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Classification of employees It can be confusing but it's important for employers to understand that there are stark legal differences between contractors and employees. As an employer, you have a responsibility to both the contractor and your business. The biggest mistake that people make is not having this clearly outlined from the very beginning on paper otherwise you could be in jeopardy of incurring some hefty fines or penalties! On several occasions, employees and contractors alike have at times been marked incorrectly as workers of the other party. First up, this can lead to tax issues because one will be held responsible for both parties' taxes. As an employer, it is your responsibility to pay and file taxes on behalf of both your business and employees. You can use the best available solution QuickBooks premier cloud hosting for that. For one thing, you'll be able to use up less of your work time classifying your everyday employees and by default understating the total payroll tax amount. Additionally, you might even hire a contractor or freelancer who is willing to take on this role at a cheaper rate than what a more experienced full-time employee would expect to be paid for the same position.

Handling overtime payment The monthly paycheck your employees get is only for the time they've been allotted to work. Any services rendered beyond their job description must be compensated for. According to US Department of Labor's opinion, any employer should pay a premium for making employees work overtime. Overtime refers to work carried out in excess of a normal workweek. A normal workweek is the number of hours that a hardworking employee puts in per week but not more than 50 hours. Whether it is paid or unpaid, it should be decided and accurately communicated to employees at the time of hiring. It's important to remember that the monthly paycheck your employees even get for just showing up to work is only for their pre-defined working hours. Any services rendered beyond their job description need to be compensated. According to the US Department of Labor, some jobs may have requirements you might think are optional, but are actually fairly important to making conscious decisions while they're on the clock. Under the Department of Labor (DOL) statutes, it's not permitted to pay a lump sum amount for overtime without any regard for the number of hours worked. Skip out on paying overtime and you might end up with unenthused and unsatisfied employees who may start looking for new opportunities elsewhere.

Accurate record keeping Proper record keeping is important for accounting firms. The IRS is a ticking time bomb and the last thing you want is to have issues with them. Therefore, it’s imperative that your employees are paid accurately and that your business records in relation to payroll are meticulously collected into one place otherwise you could be facing fines or even a visit from the IRS itself. Misplaced records and documents are a problem that a company might have to deal with if they do not feel the need to invest in new technology. In addition, companies who work with spreadsheets and files as opposed to applications leave themselves vulnerable for attacks by computer viruses, malware, and so forth. When you're running a business, it's important to be able to locate the files you need in a flash. We take this for granted when using accounting software like QuickBooks premier hosting which has virtually unlimited storage space. This is why we recommend using QuickBooks hosting technology for storing and retrieving all your information, especially as you're likely to have many documents/records such as invoices, receipts, orders and more that need accounting in one way or another whether compiling reports or filing taxes! Another issue with manual record-keeping is that it's time consuming and can be tedious as well as stressful for a single accountant to have to input every transaction into their system on their own. Due to possible mistakes from being overworked and not having enough people who can help them out transacting all the necessary tasks, this leads to accounting errors. On the flip side, accounting software like QuickBooks premier hosting is great because of the features included and how they can help a business grow. They have built-in formulas that facilitate automatic calculations. However you can edit and rectify this information whenever you want to without disrupting the final results, as well.